U.S. home prices plunge 16.6% in August

October 28, 2008 by · Leave a Comment
Filed under: Real Estate News 

Well even though I know many people have a portion of their net worth tied up in a home purchase, I am glad to continue to see prices slide.  Currently, homes are very unaffordable for most Americans and trying to monkey with the real estate market to set a floor in prices is not the answer.  All that does, is hurt the people who are saving up a real down payment (15-20%) and make them have to go into more debt to buy a home.  In most except the most luxurious areas, homes prices should be between 3-4 times the median income in the United States.  Heck, even in the ritzy areas they should only be 3-4 times the upper class median income as well.  

People seem to have this idea in American that situations can only work for certain income brackets, when most times if you have sensible rules, it can work for almost everyone.  There is always exceptions but that is not how your properly regulate in a democratic republic. 

Reuters:

Prices of U.S. single-family homes plunged a record 16.6 percent in August from a year earlier and plummeted more than 30 percent in Las Vegas and Phoenix, Standard & Poor’s said on Tuesday.

 Home prices in 20 major metropolitan areas fell 1.0 percent in August from July, according to the Standard & Poor’s/Case-Shiller Home Price Indices.

The composite index of 10 metropolitan areas declined 1.1 percent in August from July for a 17.7 percent year-over-year drop, also a record, S&P said in a statement.

“The downturn in residential real estate prices continued, with very few bright spots in the data,” David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, said in the statement.

A huge supply of unsold homes, tighter lending standards and record foreclosures have pushed down home prices, deflating a bubble from the early part of this decade.

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